Americans Earn and Spend More, But Save Less in July

Americans' personal income ticked up slightly in July by 0.2%, according to the Bureau of Economic Analysis. And personal spending rose even more quickly -- by 0.4%. While both of these results are somewhat good news for the recovery, they're not great.

Let's start with a chart for personal income and spending:

income and spending2010-07.png

You can see that July was certainly a better month than June for income growth, but it was otherwise the weakest since February. Spending growth, however, was the highest we've seen since March.

But how did spending increase twice as quickly as income? Americans saved less. Here's the chart for saving:

personal saving 2010-07.png

July had the biggest decline in spending since February, as the downward saving growth trend has now gone negative.

This data shows a few things. First, it's nice to see income grow again, after being flat in June. But a 0.2% increase is pretty weak, at best. Second, generally, it looks like sentiment picked up in July. Americans spent more and saved less, indicating that they're probably less nervous about their economic situation.

Overall, today's data is bittersweet. Spending increased, in part due to higher income, but also because Americans saved less. A better result would be all three figures increasing. But at this point, even lukewarm news is certainly better than additional grim indicators.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A Stop-Motion Tour of New York City

A filmmaker animated hundreds of still photographs to create this Big Apple flip book

Video

The Absurd Psychology of Restaurant Menus

Would people eat healthier if celery was called "cool celery?"

Video

This Japanese Inn Has Been Open For 1,300 Years

It's one of the oldest family businesses in the world.

Video

What Happens Inside a Dying Mind?

Science cannot fully explain near-death experiences.

More in Business

Just In